Obesity remains a serious health problem and it is no secret that many people want to lose weight. Behavioral economists typically argue that “nudges” help individuals with various decisionmaking flaws to live longer, healthier, and better lives. In an article in the new issue of Regulation, Michael L. Marlow discusses how nudging by government differs from nudging by markets, and explains why market nudging is the more promising avenue for helping citizens to lose weight.

Armed with a computer model in 1935, one could probably have written the exact same story on California drought as appears today in the Washington Post some 80 years ago, prompted by the very similar outlier temperatures of 1934 and 2014.

Two long wars, chronic deficits, the financial crisis, the costly drug war, the growth of executive power under Presidents Bush and Obama, and the revelations about NSA abuses, have given rise to a growing libertarian movement in our country – with a greater focus on individual liberty and less government power. David Boaz’s newly released The Libertarian Mind is a comprehensive guide to the history, philosophy, and growth of the libertarian movement, with incisive analyses of today’s most pressing issues and policies.

Search form

Tag: Barack Obama

The media tide of the past two days has carried in a great flood of stories on science, technology, engineering and math (STEM) education. ABC, NBC, AP, Reuters, the Christian Science Monitor, Politico, the Detroit News, and others joined in. This torrent of attention is due to a White House science fair at which the president announced several initiatives to boost student achievement in those fields. Details are scant, but based on the administration’s press release it seems that $100 million or so would go to encourage particular kinds of teacher’s college programs. Various extracurricular STEM programs funded by non-profit foundations were also touted in the release.

The obvious irony in the president’s plan to tweak teachers’ college programs is that those programs are themselves a key part of the problem. The nation’s state school monopolies typically require most or all of their teachers to either have a degree from a government-approved college of education or to be pursuing such a degree during evenings and weekends. Few of those studying or working in STEM fields are willing to sit through a teachers’ college program—with good reason. Not only are these programs often pointless according to their own graduates, they are not associated with improved student performance. They are a requirement without a function–at least without a function that benefits students. The one thing they do accomplish is to erect a barrier to entry that protects incumbent teachers from competition, allows the specter of “teacher shortages” to be floated at regular intervals, and thus to justify above market wages [state school teachers receive compensation that is roughly $17,000 per year higher than their private sector counterparts].

As a result, many of the most promising teaching candidates in these fields are weeded out from the start. President Obama’s plans to “improve” this barrier to entry into the profession amounts to reupholstering the deck chairs on the sunken Titanic.

But how to ensure that only effective teachers lead the nation’s classrooms given that the government certification process is not just useless but counterproductive? Here, again, there is irony. Somehow, in the thousands of different fields in which scientists and engineers work every day, the competent are distinguished from the incompetent. And somehow, those who underperform are either helped to improve or cut loose to seek work in a field (or with an employer) to which their talents are better suited. It is ludicrous to suggest that managers can effectively evaluate the work of the scientists and engineers they employ in every field _except_ education.

The media would do us all a favor if they would look past the Obama administration’s marshmallow launcher for a moment and contemplate the effect that our massive barrier to entry into the teaching profession has on recruiting scientists and engineers.

President Obama is catching some well-earned blowback for his decision to force religious institutions “to pay for health insurance that covers sterilization, contraceptives and abortifacients.” You see, ObamaCare penalizes individuals (employers) who don’t purchase (offer) a certain minimum package of health insurance coverage. The Obama administration is demanding that coverage must include the aforementioned reproductive care services. The exception for religious institutions that object to such coverage is so narrow that, as one wag put it, not even Jesus would qualify. HHS Secretary Kathleen Sebelius reassures us, “I believe this proposal strikes the appropriate balance between respecting religious freedom and increasing access to important preventive services.” Ummm, Madam Secretary…the Constitution only mentions one of those things. The Catholic church is hopping mad. Even the reliably left-wing E.J. Dionne is angry, writing that the President “utterly botched” the issue “not once but twice” and “threw his progressive Catholic allies under the bus.”

As I wrote over and over as Congress debated ObamaCare, anger and division are inevitable consequences of this law. I recently debated the merits of ObamaCare’s individual mandate on the pages of the Wall Street Journal. Here’s a paragraph that got cut from my essay:

We can be certain…that the mandate will divide the nation. An individual mandate guarantees that the government—not you—will decide what medical services you will purchase, including contraceptives, fertility services that result in the destruction of human embryos, or elective abortions. The same apparatus that can force Americans to subsidize elective abortions can also be used to ban private abortion coverage once the other team wins. The rancor will only grow.

Either the government will force taxpayers to fund abortions, or the restrictions necessary to prevent taxpayer funding will reduce access to abortion coverage. There is no middle ground. Somebody has to lose. Welcome to government-run health care.

The same is true for contraception. The rancor will grow until we repeal this law.

ObamaCare highlights a choice that religious organizations – such as the United States Conference of Catholic Bishops, where my grandfather served as counsel – have to make. Either they stop casting their lots with Caesar and join the fight to repeal government health care mandates and subsidies, or they forfeit any right to complain when Caesar turns on them. Matthew 26:52.

The center-right consensus is that in order to balance the budget and improve health care, Congress needs to overhaul Medicare using some form of voucher or premium support. Whereas the current program offers an essentially unlimited subsidy for medical care, under these options Congress would give each enrollee a fixed subsidy with which they could purchase private health insurance. But how should Congress determine the size of these fixed subsidies?

The House GOP approved a budget under which Congress would pick the amount. Beginning in 2022, all new enrollees would receive a voucher. The average voucher amount would be equal to the average amount Medicare currently spends per enrollee in 2011, adjusted for overall inflation. Congress would adjust the actual voucher amount for each enrollee based on health status and income, so some enrollees would receive larger and some would receive smaller vouchers. But since the average voucher would grow at the rate of inflation (i.e., about 2.5 percentage points slower than per-enrollee Medicare spending currently grows), this approach would reduce Medicare spending over time.

A drawback of this approach is that opponents can (and do) demagogue it, claiming that the vouchers would be insufficient and seniors would die for lack of medical care. This demagoguery ignores two important factors.

First, as Peter Orszag and President Obama themselves loved reminding us during the ObamaCare debate, there is lots of wasteful spending in the Medicare program. Orszag frequently cites the Dartmouth Atlas, which estimates that one third of Medicare spending is pure waste. Since the amount of the House GOP’s vouchers would be based on per-enrollee Medicare spending, they would essentially give Medicare enrollees 50 percent more money than they would need to purchase all the beneficial medical care that Medicare currently provides. The vast amount of wasteful Medicare spending is a disgrace. But when converting to a voucher system it’s an absolute boon, because it provides a huge margin of safety. It means that enrollees could reduce their medical consumption by one third without harming their health.

Second, the anti-reform demagogues presume that vouchers would do absolutely nothing to make health care more efficient. Vouchers would make the nation’s 50 million heaviest consumers of medical care cost-conscious in a way they have never been before. Like an old man trying to send back soup at a deli, they will force providers to cut costs and thereby make their vouchers go farther.

It is because of this second factor that Yuval Levin proposes a different way of setting the voucher amount(s). Levin proposes to use a competitive-bidding process. Under this approach, everyone in Medicare would receive a voucher equal to the second-lowest bid that health plans submit to provide a standard package of benefits. Enrollees could then apply their voucher to any private plan or even a government-run plan. Under this approach, enrollees would still be cost-conscious: if the health insurance policies they choose cost more than the voucher amount, they would have to make up the difference; if the policies cost less, they would keep the savings. Levin argues that this cost-consciousness would also lead enrollees to put pressure on providers to cut costs, and therefore the amount of the second-lowest bid would automatically grow at a slower rate than per-enrollee spending under the current Medicare program. ”In such a system,” Levin writes, “the premium-support benefit would grow exactly as quickly as required to provide a comprehensive insurance benefit, since the growth rate would be determined by a market process rather than a preset formula. ” Voila! The competitive forces of the market would cut Medicare spending.

The best evidence that competitive bidding will reduce Medicare spending is that the durable medical equipment manufacturers have fought efforts to impose it on them. So while I’m not hostile to the idea, I don’t think it’s an improvement over the House GOP plan.

First, Levin calls competitive-bidding “the Confident Market Solution” because he is confident that markets will reduce the cost of health care. I’m confident of that too. But I’m also confident that rent-seeking will be present in Medicare, no matter what reforms Congress enacts. I am far less confident that markets will reduce costs faster than rent-seeking will increase them. My sense is that politicians will be much more likely to hold the line on rent-seeking if they actually draw one.

Second, House Budget Committee chairman Paul Ryan (R-WI) crafted a House budget that proposed to reduce the growth of Medicare spending using hard, score-able numbers. Hundreds of House members likewise stuck their necks out by voting for it. The Confident Market Solution essentially undercuts those folks by telling them they should not have done something so bold and courageous. Levin is no doubt correct that a competitive-bidding process that doesn’t specifically commit Congress to reducing Medicare spending growth is more politically feasible than a voucher plan that does. When politicians choose the more politically perilous option, however, reformers should tell the world why that was the right thing to do.

Third, Levin would include a public option in the competitive-bidding system. I am also confident that the government would heavily subsidize that health plan until it drove private insurers (and any hope of cost-cutting innovations) out of the market.

I’ve discussed what I think is a better approach to Medicare reform here and here.

Sen. John McCain has exhibited personal courage, but his geopolitical judgment is uniformly awful. Over the last 30 years there has been no war or potential war that he has opposed. In 2008 he wanted to confront nuclear-armed Russia over its neighbor Georgia, which started their short and sharp conflict. It would have been ironic had the Cold War ended peacefully, only to see Washington trigger a nuclear crisis in order to back Georgia as it attempted to prevent the territories of Abkhazia and South Ossetia from doing what Kosovo did with U.S. military aid: achieve self-determination (by seceding from Georgia).

Now Senator McCain is banging the war drums in Libya. But he seems to have trouble remembering who are the good guys and who are the bad guys.

Although now crusading against Moammar Qaddafi, two years ago he joined Sens. Joe Lieberman and Lindsey Graham in Tripoli to sup with the dear colonel. There the three opponents of tyranny whispered sweet nothings in the dictator’s ear, offering the prospect of military aid. After all, the former terrorist had become a good friend of America by battling terrorists.

A government cable (leaked by Wikileaks) memorializes the excruciating details of meetings between the Senate delegation and Qaddafi, along with his son Mutassim, Libya’s “national security adviser.” We find McCain and Graham promising to use their influence to push along Libya’s requests for C-130 military aircraft, among other armaments, and civilian nuclear assistance. And there’s Lieberman gushing, “We never would have guessed ten years ago that we would be sitting in Tripoli, being welcomed by a son of Muammar al-Qadhafi.” That’s before he opined that Libya had become “an important ally in the war on terrorism,” and that “common enemies sometimes make better friends.”

Obviously, that was then and this is now. Along the way Senator McCain and his fellow war enthusiasts realized that Qaddafi wasn’t a nice guy after all. Who knew? I mean, he had only jailed opponents, conducted terrorist operations against the United States, and initiated a nuclear weapons program. So earlier this year they demanded that the United States back the rebels, the new heroes of democracy.

Until now, anyway.

Anyone who has covered civil wars won’t be surprised to learn that the insurgents aren’t always playing by Marquess of Queensbeerry rules. Indeed, the opposition is united only by its hatred of Qaddafi. It includes defectors, including Qaddafi’s former interior minister who was just assassinated under mysterious circumstances; jihadists and terrorists, some of whom fought against U.S. forces in Iraq; tribal opponents of Qaddafi; and genuine democracy advocates devoted to creating a liberal society. Unfortunately, there is no guarantee that the good guys will win any power struggle certain to follow Qaddafi’s ouster.

The Obama administration claimed to enter the war to protect civilians. Yet NATO has occasionally threatened to bomb the rebels if they harm civilians. Reports of summary executions and looting by insurgent forces have emerged. Now Senator McCain has written the opposition a letter—more polite than sending a drone, I suppose—demanding that the Transition National Council stop being mean to former Qaddafi supporters.

In his letter to the TNC, dated 20th July, Senator McCain, writing as “your friend and supporter,” pointed out “recent documentation of human rights abuses committed by opposition figures in the western Libyan towns of al-Awaniya, Rayayinah, Zawiyat al-Bagul, and al-Qawalish”. He continued: ” According to Human Rights Watch, a highly credible international non-governmental organisation, rebel fighters and supporters have damaged property, burned some homes, looted from hospitals, homes and shops, and beaten some individuals alleged to have supported government forces.

“I am confident you are aware of these allegations…. It is because the TNC holds itself to such high democratic standards that it is necessary for you and the Council to take decisive action to bring any human rights abuses to an immediate halt.”

Who would have imagined that a civil war could be nasty and that not everyone who opposes a dictator is a sweet, peace-loving liberal? Certainly not John McCain.

The point is not that Qaddafi is a nice guy. The world would be a better place if he “moves on,” so to speak. But there’s no guarantee that a rebel victory will result in a liberal democracy dedicated to international peace and harmony. And there’s nothing at stake that warrants involving the United States in yet another war in a Muslim nation—the fifth ongoing, if one counts the extensive drone campaigns in Pakistan and Yemen, along with Iraq and Afghanistan.

When Senator McCain urges Washington to bomb or invade the sixth Islamic state, which is inevitable given his past behavior, it would be worth remembering how he has managed to be on every side of the Libya issue, supporting tyranny before he opposed it. When it comes to war, the best policy is to do the opposite of what he advises. Only then will America find itself finally at peace.

Cato Institute scholars Daniel J. Mitchell and Chris Edwards evaluate the plans offered by Republicans for lowering federal spending using a so-called “Cut, Cap and Balance” proposal that would make small cuts to federal spending in the short run, cap federal spending, and balance the federal budget using a tax-limited balanced budget amendment to the Constitution.

These words could only be uttered by someone who knows very little about economics or the history of human progress. In fact, they could only be uttered by someone who has never reflected on this question before in his life. Because if you reflect for one moment, you come up with this glaringly obvious counterfactual: we use a lot more labor-saving technology today than in previous generations, and yet we also employ far more people. Therefore, increased automation does not lead to decreased national employment.

If you do more than just think for a second – if you read an economic history book, for instance – you discover that increased automation doesn’t even necessarily lead to decreased employment in the industry being automated! The classic example is the 19th century British textile industry. The so-called “Luddites” smashed automated looms fearing that they would lead to rampant unemployment in their industry. But, as the new technology proliferated, textile industry employment rose. Among other reasons, increased efficiency drastically lowered the prices of textile goods, that shot demand through the roof, and to meet the new demand new workers were required to operate and maintain the new machinery.

There are other examples, of course, and the president will save the American people a great deal of hardship, and himself further embarrassment, if he familiarizes himself with them. Here’s a good brief introduction from the British Secretary of State… under Margaret Thatcher.

Update:

For those having trouble viewing the video, here is a transcript of the relevant Q&A:

Q: Why, at a time of record profits, have you been unable to convince businesses to hire more people Mr. President?

A: [….] the other thing that happened, though, and this goes to the point you were just making: there are some structural issues with our economy, where a lot of businesses have learned to be a lot more efficient with a lot fewer workers. You see it when you go to a bank and there’s an ATM, you don’t go to a bank teller. Or you go to the airport, and you’re using a kiosk instead of checking in at the gate.